Crude oil is tiptoeing, as traders are not fully sure if they want to go long or short. However, professionals are assured that the only direction they want to trade is towards the downside, given the glut we have on the market. Looking at the commodity futures trading commission data, it is becoming evidently clear that money managers have inflated their short position.
No matter what the data from the rigs is telling you, when you gaze at the stockpiles in the US, it roars at you, because the domestic production is shredding and tearing up all the previous records. The US domestic production has augmented to 9.29 million b/d and the same figure was 8.9 million b/d only a few months back. These are overwhelming numbers and there is no end in sight yet, and now, we need to not only strip out the 2 million extra b/d, but also need to see a sturdy demand, which can balance the equation if you want to see the crude crossing the $100 mark again.
Saudi Arabia, the world’s biggest crude exporter is feeling threatened and in order to maintain their market share, which they can easily afford at not only at current price, but also at a much lower price, has increased the production further by 130K b/b producing whopping 9.85 m b/d during the month of Ferburary. Russia, whose equity market and currency have bounced strongly back up from their lows is also resolute to increase their production and their oil production increased to 10.65m b/d on year on year basis during the month of Feburary.